Any thoughts?

[mom901]

I found this on a site and am worried, does anyone have any thoughts on this letter or can any of it be true or scary? It really has been bothering me. Thanks



Just finished with Chapter13 and would not recommend this to anyone. We ended up paying out far more than what some might have thought possible - especially to the lawyer. Yes.. they took everything and MORE!! The worst part perhaps was the health consequence of making our way thru Chapter 13. The uncertainty, impoverishment, push to finish up with one thing or another despite grave illness aged us beyond belief. Our home of 20 some years- GONE. Our health - DESTROYED. FAMILY PROPERTY - GONE. We are now living out of paper and plastic boxes; actually had to scrounge pennies for food and heat durng this 5 year imprisonment. While you will have zero debts at the end, your life will inevitably be far shorter than it would have been had you taken a different path. One more thing you should know as you make your way to file chapter 13, your debts will magically soar within short order so in the end someone can say.. "just look at how much this saved you". It is a cruel joke because what isn't taken by the creditors will assuredly go to the lawyers and trustee. I can also attest to the fact that your children will also suffer... You are not alone in this process. Guess I have lots to say on this subject.. The last piece is that the feds and state can do whatever they want and no one will touch them. If you owe the state any money WATCH YOUR BACK. They have a tendency to forget abt any payments that have been made to them and with this it's up to you to produce the PROOF. Who would have "thunk" that the State would try to cheat you out of more money! OMG!!!

[NoTomatoCan]

Please spend some time reading through this forum. Is Chapter 13 a picnic? No. But it isn't a death sentence, and is the best option for many, and the only way that some folks could ever get out of debt.

I have no idea about that letter you posted, but I don't believe it is how most on this forum feel. The best way to combat fear inspiring letters like this is to get the facts. You are in the right place to do that.

[minan]

Just finished with Chapter13 and would not recommend this to anyone.

Chapter 13 is a legal option to handle debt. There are debts that cannot be discharged under a 7. A 13 provides a way to pay back priority debt while allowing you to keep your assets if you want to keep you home etc... Bankruptcy's most important feature is the automatic stay. The minute you have filed and have a case number, all creditors, including state and federal creditors, have to stop any collection efforts against you.

We ended up paying out far more than what some might have thought possible - especially to the lawyer. Yes.. they took everything and MORE!!

First, you need to make sure you get a good attorney. Interview several. I interviewed/met with 4 different lawyers. A good lawyer will ensure you only pay back the debt you owe, no more.

The worst part perhaps was the health consequence of making our way thru Chapter 13. The uncertainty, impoverishment, push to finish up with one thing or another despite grave illness aged us beyond belief. Our home of 20 some years- GONE. Our health - DESTROYED. FAMILY PROPERTY - GONE. We are now living out of paper and plastic boxes; actually had to scrounge pennies for food and heat durng this 5 year imprisonment. While you will have zero debts at the end, your life will inevitably be far shorter than it would have been had you taken a different path.

Most people who file chapter 13 do so to protect assets, such as a home, car or other items. In addition, any debt identified as priority debt (child support, taxes) have to be paid back no matter what. If done correctly, you will keep your assets under a chapter 13, however you have to be willing to follow the plan as set up and make your payments on time.

I think there's more to this person's story then they are telling. I recommend you read the info on this site. I think you will see that chapter 13 is a good option so long as you follow the rules and have a good lawyer.

You'll also find stories on here of folks who have successfully lived through a chapter 13 and managed to actually save money.

One more thing you should know as you make your way to file chapter 13, your debts will magically soar within short order so in the end someone can say.. "just look at how much this saved you". It is a cruel joke because what isn't taken by the creditors will assuredly go to the lawyers and trustee. I can also attest to the fact that your children will also suffer... You are not alone in this process. Guess I have lots to say on this subject..

Only a certain percentage can go to the trustee. I believe this percentage is based on the total amount of debt. It is only fair to pay a lawyer for any work they do for you so I believe they are one of the first to get paid.

The last piece is that the feds and state can do whatever they want and no one will touch them. If you owe the state any money WATCH YOUR BACK. They have a tendency to forget abt any payments that have been made to them and with this it's up to you to produce the PROOF. Who would have "thunk" that the State would try to cheat you out of more money! OMG!!!

This is not necessarily true. The IRS and State Tax Authority have to follow the bankruptcy laws. Under the Automatic Stay, they have to cease any collection efforts. In addition, you force them into a payment plan whether they like it or not.

My issue has to do with back taxes. The IRS has already issued levies against my assets. After the 2nd one, I made the decision to file chapter 13 so I can get protection under the Automatic Stay of a Chapter 13. The IRS will be forced into a payment plan whether they like it or not. All penalties and interest charges will stop and I can take the next 5 years to pay back what I owe without accruing any further interest/penalty and with peace of mind. Right now, I live in constant fear that they will try to take more of my assets. I have no protection right, however after July 29th (I file on this day), I hope to be able to sleep through the night.

I'm happy with my choice of lawyers and she seems to really care about me and doing what's best for me.

[TexasEx]

Look, I think this is this particular person's point of view. Obviously any point of view can be hindered by their perspective (half glass empty/full). Everybody's personal situation is different (amount of debt, expenses, income, etc). Your trustee also plays a large portion as to how strict/lenient they are but I will second everything that has already been said.

You want to hear my story so you can feel better? We filed for 13 december of last year. Mostly to get rid of a defficiency balance on a second home that was $200K upside down. Also to dump another $95K of unsecured debt (credit cards, etc). I make good money while my wife stays at home. Basically at the end of the day we will end up paying about $18K over five years back for all that we owe (almost $300K of debt) plus a bit more to secured creditors (attorney, part of one our cars, etc). Our budget is very easy to live on and we are living way more comfortable than when we were trying to struggle paying both homes, credit cards, etc. What did we loose when we filed? An upside down second home that we did not care for, and an RV that was also upside down. Nothing else. We are very happy we filed and would recommend to anyone that is in our situation to not wait and file. Basically in four and half more years we will be debt free (except for our home) something that we never could have done before we filed. Our mental health is better because we no longer have to worry and stress on how we are going to pay our bills. Our biggest piece of advice: get a good attorney.

Now obviously you know very little about our situation but maybe even a bit more than what you know about that person on the other post. Don't stress, it is not worth your sanity. Ch. 13 does not have to be a "5 year imprisonment". Is it a 5 year vacation in Fiji? No of course not. But take it for what it is, a chance to take a step back so you can leap forward.

[espo1357]

The issue that many have (me) is that a home underwater is NOT an asset.

Stupid me wanted to keep the home after the modification, but I now see that this home is not an asset since it is upside down so much.

Don't get fooled people, like me. Fortunately, my job is ending soon, and I can convert to a 7.

Can't wait to do that.

[mom901]

Thank you to all of you that have taken your time on your Saturday night to respond to my post and to the letter I saw that scared me. We filed and our attorney and paralegal are working our plan. I am scared. I know the amount we pay for our home loans and taxes are what we are normally paying, it is just going through another person's hands to make the payment plus fees. We own our home but have an installment loan and line of credit we took out to finish our home, we built it ourselves 9 years ago. We are on family property and I care for my mom next door, it is the most important thing that we keep this home we worked so hard to build. We owe 12k in back taxes and those need to be taken care of. Our monthly payment for the loans is $1300, the taxes we pay payments of around $250 but are always a few years behind but were hoping to get caught up someday if I went back to work someday. We still owe the lawyers $1800 and then the trustee gets minimal percentage here. Yes we would pay these secured amounts anyway ourselves but I think the "big amount at once per month" has me kind of panicked, I don't know why. They said we can pay weekly to the trustee if we want. They don't have an exact number until they find out early next week if they can get some of the back penalties removed, but they are looking at $1625 - $1694 per month. It just has me freaked out I guess, it just seems so permanent and scary. My husband works in construction and makes an average take home per month of $4k, give or take on good months and bad months. We scrounge now and have been without our credit cards for two years sinced they closed out, we owe $60k + on them, unsecured. We really in the last two years have buckled down and have been living on cash. Here and there we get into a bind but have worked it out somehow. I just feel like handing over everything to a trustee in charge instead of us that something bad will happen because we are not in control. Our home loans are current but the lawyer said because of the taxes we are lucky the loaning bank hasn't tried to do something and the real estate tax company hasn't done more to us but can at any time. I feel like we are failures, I feel upset and scared. Part of me thinks we can do this, we have no choice, the legal protection is necessary to save us and the other part of me thinks something bad is going to happen. We are very thrifty, we do not splurge or live extravagantly, we buy our clothes at thrift stores, live by a strict budget with what we have but I feel like what if my husband is off we are going to lose our home if we can't pay the payment, that scares me. We are good people that just tried to care for family and in the meantime with me quitting my job to do that out of my heart it has made our finances suffer. I feel ashamed and my husband and I get into discussions that are not very pleasant, it is depressing to be where we are right now, but I am trying to go into this not afraid and think of it as a good saving thing, but it is hard. All the responsibility for income has been on my husband and when he is slow with work it hurts us. Our only child is precious, she is going to full day school this year, I will have some free time to do something but I also will have to care for my mom so I feel I can't depend on it. My husband makes so much more than me, if he was off my tiny amount wouldn't pay the bills. This board has saved me so many nights lately with all of this going on, you don't even know how much you posters have helped my sanity. When I saw this post I thought, oh no, this could be us. I wish I could stop being upset and just relax, but I can't.

[lorelei]

Mom - it sounds to me like you have two issues here.

One is a matter of facts. You have a lot of questions about the bankruptcy process, naturally. And since pretty much everyone else here knows more about that to me, I'll leave that to them - and your attorney! - to explain.

But the other problem sounds like it might be an emotional one. If the anxiety is really getting to you, can you get counseling somewhere? Some employers offer Employee Assistance Programs to workers and their families, which let you get help at no cost - do you qualify? If not, there are some therapists who work on sliding-scale fees. If you are in bankruptcy, some might be willing to reduce their fee. Or if you belong to a church/synagogue/other religious congregation, is there a pastor or equivalent who might be able to meet with you? I know, believe me, I know that this process can bring out so many intense feelings and it's easy to feel overwhelmed by it all. I personally have found that having an empathetic outsider who I can talk things over with has been such a big help to me. I know it's not everyone's cup o' tea, but it can be very helpful for some.

Taking care of the legal and financial matters is only one part of this process. You still have to take care of yourself, too!